Vanilluxe Corporation acquired an 80% interest in Escavalier Company on January 1, 2019 for P1,225,000. On this date, a land with a carrying amount of P1,000,000 had a fair value of P1,050,000 and the capital stock and retained earnings of the two companies were as follows: The assets and liabilities of Escavalier were stated at their fair values when Vanilluxe acquired its 80% interest and the proportionate share in net identifiable assets was used to initially measure the non-controlling interest. Vanilluxe uses the cost method to account for its investment in Escavalier. The consolidated shareholders' equity at December 31, 2019: Capital stock Retained earnings Vanilluxe P3,150,000 1,400,000 Escavalier P875,000 175,000 Net income and dividends for 2019 for the affiliated companies were: Escavalier P157,500 Vanilluxe P525,000 315,000 Dividends payable December 31, 2019, 157,500 Net income Dividends declared P4,846,000 Answer not given O P5,201,000
Vanilluxe Corporation acquired an 80% interest in Escavalier Company on January 1, 2019 for P1,225,000. On this date, a land with a carrying amount of P1,000,000 had a fair value of P1,050,000 and the capital stock and retained earnings of the two companies were as follows: The assets and liabilities of Escavalier were stated at their fair values when Vanilluxe acquired its 80% interest and the proportionate share in net identifiable assets was used to initially measure the non-controlling interest. Vanilluxe uses the cost method to account for its investment in Escavalier. The consolidated shareholders' equity at December 31, 2019: Capital stock Retained earnings Vanilluxe P3,150,000 1,400,000 Escavalier P875,000 175,000 Net income and dividends for 2019 for the affiliated companies were: Escavalier P157,500 Vanilluxe P525,000 315,000 Dividends payable December 31, 2019, 157,500 Net income Dividends declared P4,846,000 Answer not given O P5,201,000
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 30E
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Transcribed Image Text:Vanilluxe Corporation acquired an 80% interest in Escavalier Company on
January 1, 2019 for P1,225,000. On this date, a land with a carrying amount of
P1,000,000 had a fair value of P1,050,000 and the capital stock and retained
earnings of the two companies were as follows: The assets and liabilities of
Escavalier were stated at their fair values when Vanilluxe acquired its 80%
interest and the proportionate share in net identifiable assets was used to initially
measure the non-controlling interest. Vanilluxe uses the cost method to account
for its investment in Escavalier. The consolidated shareholders' equity at
December 31, 2019:
Capital stock
Retained earnings
Vanilluxe
P3,150,000
1,400,000
Escavalier
P875,000
175,000
Net income and dividends for 2019 for the affiliated companies were:
Escavalier
P157,500
Vanilluxe
P525,000
315,000
Dividends payable December 31, 2019, 157,500
Net income
Dividends declared
P4,846,000
O Answer not given
P5,201,000
P5,043,500
O P4,886,000
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